An Arab country that saved the day for Pakistan: Gulf Times

Internews/Islamabad
An international conspiracy to split Pakistan into two zones by turning them into two separate geographic units was foiled by a brotherly Arab Muslim country in Dubai a week before the Friends of Pakistan meeting in Tokyo last week, a report said yesterday.
A plan to set up so-called “Trust Fund” was drawn up for provision of “special aid” for the provinces of Balochistan and the Frontier with huge amount of international assistance separately meant to disconnect them from rest of the country.
The idea had, however, been widely accepted by senior officials in Pakistan and even some high ups in Islamabad considered it a ‘lucrative’ and ‘harmless proposition’.
Sources revealed some Western countries campaigned to formalise the idea acceptable to all the participants of the Dubai meeting.
In this regard, several calls were made from Abu Dhabi to different capitals of the world to get an approval but the country in question, which enjoys tremendous esteem in the Muslim world and has a leading role for the Muslim Ummah, came in the way of the proposal.
This country delayed announcing its contribution for the Tokyo meeting. The country in question threatened that if the West continued to press for the proposal it would publicly announce its opposition to the idea and may stay away from the forum, the sources said.
This leading Muslim country was of the view that once the Trust Fund was established it would be used as conduit for the dismemberment of Pakistan.
The diplomats expressed apprehension about Pakistan’s interests and said once the Trust Fund became effective, the United Nations would be subsequently asked to come forward to play its role for the region to the detriment of Pakistan.
It was feared that in a calculated step, international financial institutions would contribute billions of dollars in the name of rehabilitation of those areas. Later, they would have asked the world body to come forward to play its role to save their huge investment there.
In this way action by the interested world powers would have the mandate of the United Nations to give it the cover of legitimacy.
This could have cut Pakistan down to size on the one hand, and paved the way for the creation of a buffer state between Pakistan and Afghanistan on the other. Most of the bordering countries of Pakistan would have supported such a division.

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Pakistan to get $7.6 billion under IMF programme: Tarin: Business Recorder

RIZWAN BHATTI

KARACHI (November 16 2008): Pakistan, after seven years' gap, has finally re-entered the International Monetary Fund (IMF) programme to receive $7.6 billion for replenishing its fast depleting reserves, after its friends, multilaterals and other donor agencies and international financial institutions showed reluctance to help it financially.The announcement to this effect was made by Shaukat Tarin, Advisor to Prime Minister on Finance, at a press conference, along with Dr Shamshad Akhtar, Governor, State Bank of Pakistan.Tarin said: "IMF has accepted Pakistan's formal request for funding, and an agreement with IFM has been reached on a rescue package to overcome the country's economic crisis." He said that Pakistan would receive $4.5 billion this year as part of the 23-month IMF deal, while the remaining amount would be received next year.

He said: "The interest rate on the IMF programme will be 3.1 to 3.5 percent, with some changes as per market conditions, which would be repaid during the fiscal years 2012 to 2016."However, he made it clear that this fund would not be used for any non-development expenditures and stock markets, saying that the loan would be utilised for maintaining the declining foreign reserves, besides overcoming its balance of payments crisis. He said that the IMF financing facility would give confidence not only to the markets and the investors but also to other IFIs and friends.

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Pakistan can raise $5bn in 30 days: Dawn

By Yousuf Nazar

Given the current ‘political realities’, Pakistan seems to have little option but to go to the IMF. But the truth is Pakistan can raise $5 billion in the next 30 days if it wants to; even if Saudi Arabia does not extend oil credit facility.The United States wants Pakistan to work with the IMF and the government does not want to upset Washington. Otherwise why would it sit on proposals (like the exchangeable bonds and the securitisation of remittances) for months that could have raised a few billion dollars? The proposal from the Chinese to buy minority stake in the National Bank of Pakistan, likewise, was put in cold storage.Raising $5 billion will take Pakistan’s foreign exchange reserves to about $12 billion. This would represent a comfortable level of four months worth of next 12 months of imports as Pakistan’s annual import bill is likely to drop sharply to $33 billion from $40 billion in FY 2007-08 due to the collapse of the price of oil and these of other commodities such as edible oil. Four months of import cover is considered a reasonable level and the country can use this time to take steps, such as privatisation or joint ventures in strategic areas, to mobilise funds for its medium- term needs.Just consider the following four of the many ways the government can use to raise $5 billion for meeting the current crunch. These are not necessarily the most desirable options but are far better than carrying a begging bowl around the world.— Pakistan has about $1.8 billion in gold reserves. Borrowing or leasing against gold is a standard international practice. Pakistan can borrow for six months at the rate of around 2.1 per cent from the central bank of a friendly country such as the United Arab Emirates. India did this in 1991 for a short period.— Pakistan can borrow (not beg) at least US$1.5 billion from China on commercial terms by putting its shares in large government-owned corporations as collateral. China has, in the past year, extended loans to other countries (e.g. Congo) on the basis of proper collateral. The cost of loans secured against collateral can be significantly cheaper compared with other options.— Pakistan can get another $800 million in a few days if the US reimburses the remaining amount for 2008 it should pay under the Coalition Support Fund relating to expenditure incurred on combating terrorism. Pakistan has received only one instalment ($364.7 million in September 2008) for this year’s expenses. A senior military source told Internews that the amount for reimbursement was calculated on the basis of six-monthly reports. He said all bills related to the expenditure had been audited jointly by a team of Pakistani military officers and the US embassy.

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